Davis Polk & Wardwell’s securities litigation work during the last two years encompasses a broad range of cases from the financial crisis to M&A battles and Ponzi schemes. The results speak for themselves: The elite securities team consistently scored outright dismissals in many key cases and deftly handled a range of high-stakes matters.
With a summary judgment motion on the eve of trial, the firm knocked out the last of a dozen lawsuits filed against Credit Suisse Securities (USA) LLC over allegedly false research reports on America Online Inc.’s merger with Time Warner Inc. And, representing H.J. Heinz Company, the firm cleared the way for its client’s $28 billion sale to Berkshire Hathaway Inc. and 3G Capital by getting a dozen shareholder suits dismissed. Theodore Bobby, Heinz’s general counsel at the time, calls Davis Polk partner Scott Luftglass “relentless in his preparation and courtroom advocacy.”
Davis Polk also played a key role representing Bank of America Corporation’s board in litigation over the bank’s controversial Merrill Lynch & Co. acquisition. After making sure that its director clients did not have to pay into the bank’s $2.4 billion class action settlement, Davis Polk reached a deal to settle a derivative action for only $20 million—a settlement so favorable to its clients that plaintiffs in a second derivative suit intervened and convinced U.S. District Judge Kevin Castel to reject it.
Biggest Win: Davis Polk took on Bernie Madoff bankruptcy trustee Irving Picard, who sought to recover $1 billion that the owners of the New York Mets had withdrawn from their Madoff accounts before the Ponzi scheme was uncovered. But the firm successfully capped the potential liability of team owners Fred Wilpon and Saul Katz, partners in Sterling Equities Inc., to losses in the two years prior to Madoff’s collapse, or just over $300 million. The ruling paved the way for a $162.5 million settlement. Better yet: Wilpon and Katz might end up paying for the settlement with money recovered from a $178 million claim for their own Madoff losses. “I don’t think we’ve ever seen a happier client,” says litigation head James Rouhandeh.
Biggest Loss: After the firm obtained the dismissal of a shareholder class action brought over CVS Corporation’s $27 billion merger with Caremark Rx Inc., the U.S. Court of Appeals for the First Circuit revived the case, finding that some allegedly false statements could have caused the stock drops. Davis Polk has renewed its motion to dismiss the case.
Ongoing Cases: The firm currently represents the 33 underwriters of Facebook Inc.’s IPO in actions alleging that some underwriters used inside information to reduce their earnings forecasts.
What Clients Say: The firm is defending longtime client Morgan Stanley in virtually every investor litigation stemming from the financial meltdown. “They’ve done an extraordinary job so far coordinating [the suits] at a reasonable cost across multiple jurisdictions,” says Morgan Stanley general counsel Eric Grossman. “We’re very pleased.”
Practice Group Size and Revenue
Practice Group as Percent of Firm: 22%
Percent of Firm Revenue 2012: NA